Economic Survey 2025-26: India's Macroeconomic Position Strong, Rupee Weakness Reflects Global Uncertainty

The Economic Survey 2025-26, tabled in Parliament by Finance Minister Nirmala Sitharaman, provides a clear and timely assessment of India’s macroeconomic position as the country steps into 2026. The most striking takeaway is the steady weakening of the Indian rupee, a trend that reflects not domestic weakness but the strain of an uncertain and volatile global environment.

According to the Survey, the rupee depreciated by nearly 6.5 per cent against the US dollar during the past year. This decline has been driven by a widening balance of payments gap, uneven capital inflows and prolonged geopolitical tensions. For a capital-importing economy such as India, currency stability is closely linked to the confidence of foreign investors. Any slowdown or hesitation in global fund flows is quickly reflected in the exchange rate. At the same time, the Survey underlines that the rupee is “punching below its weight”, indicating that its current valuation does not fully mirror India’s economic fundamentals.

The document, however, is far from pessimistic. It presents an economy that remains structurally resilient. Inflation is largely under control, agricultural prospects are favourable, liquidity conditions remain comfortable and corporate balance sheets are healthier than they have been in years. These are not signs of stress, but of an economy absorbing external shocks while preserving internal stability.

The strong export performance of the automobile sector reinforces this confidence. With over 53 lakh vehicles exported in FY25, India is steadily strengthening its position as a competitive manufacturing and export hub. The data also shows that a weaker currency, though unsettling, can improve export competitiveness when supported by solid industrial capacity.

The Survey becomes more reflective in its assessment of India’s strategic standing. Referring to the Lowy Institute’s Power Gap Index, it notes that India is still operating below its potential. For a nation aspiring to play a larger global role, this is a sobering observation. In an era marked by shifting trade equations and rising geopolitical frictions, economic size alone will not suffice. Policy coordination, reform momentum and institutional efficiency will determine how effectively India converts potential into global influence.

For investors and business leaders, the message is straightforward. Opportunities remain strong, especially in emerging sectors. Electric mobility, backed by the Production-Linked Incentive (PLI) scheme and supportive policy measures, stands out as a growth area. The Survey also draws attention to a quieter but meaningful reform: the move towards a behavioural approach in tax administration to improve compliance and reduce litigation, which can significantly enhance the ease of doing business.

Overall, the Survey projects cautious confidence. The rupee’s weakness is better understood as a reflection of global uncertainty rather than domestic economic fragility. India’s economic foundations remain robust, but complacency would be risky. The Survey serves both as reassurance and as a warning that sustained growth cannot rely solely on demographics and market size.

The responsibility ahead is collective. The government must remain reform-driven, businesses must invest with a long-term perspective, and households must continue to participate confidently in the growth process. The Economic Survey 2025-26 does not promise an easy journey, but it makes one point unmistakably clear: India has the economic depth and institutional capacity to withstand turbulence, provided it acts with clarity, discipline and coordination.